Tax Officers Raid Over 100 Illegal Gambling Venues in Slovakia Bust

Gambling and tax go hand in hand. As a traditionally heavily regulated industry, governments are often only willing to loosen the legal strings in exchange for licensing, tax revenue, and the creation of a legitimate industry.

But this relies on both governments and gambling operators playing fair, and in a number of countries around the world, they are often in more direct conflict.

In Slovakia, tax authorities have carried out a co-ordinated raid of illegal gambling facilities, including confiscating gaming machines, over a two day period, in order to assess whether they were being used for gambling.

According to reports emerging this week, the authorities successfully busted over 100 venues, in what is the biggest campaign of its kind since new gambling laws came into force. They seized as many as five machines, while sealing up a further 75, in order to ensure they cannot be used by consumers in the interim.

Authorities also seized the books from 2017 and 2018 from four companies thought to be operating these machines, in what would be a contravention of the law.

The investigations centre around quiz machines, which the authorities suspect may be used for real money gambling purposes. There have also been suggestions that the machines were open to players under 18, and that the game servers in these machines are located offshore.

In addition to determining whether the machines have been used for illegal gambling, the authorities are also pouring through financial records from the last two years, to determine whether they can apply additional taxes and fines to the operators concerned.

Ľudovít Makó, who heads the department responsible for the investigations, said they had already encountered manipulation attempts during their raids.

“In some facilities the gambling machine was turned off during the investigation, while in the others there were missing internet connections and power supplies.”

There are thought to be as many as 800 machines in Slovakia that could be subject to similar testing, with the tax authorities acting on a tip that a number of these operators could be using their machines for gambling purposes.

The machines are to be taken for testing at the Technical Testing Institute. If they are found to be in breach of the law, the authorities have said they will seize the machines permanently, as well as applying hefty fines to those companies that have been operating them.

This is in keeping with a broader crackdown from the Slovakian authorities. The Association of Entertainment and Gambling has reported an increase in the number and revenues raised from gambling fines in 2017 over 2016, rising from 47 fines to over 210, and revenues of over $441,000.

In the present case, the Slovak authorities are well within their rights to challenge operators who are in breach of the law. While there is no denying the volume and frequency of these types of fines has increased, and that this is a direct benefit to tax receipts, operators are aware of the law – and it would seem, in some cases, intentionally operating in breach of it.

However, authorities do need to take care in these situations not to be seen to be treating gambling as fair game for seizures and financial penalties. While these seem exceptional cases, there are documented instances of governments clamping down far more aggressively on legitimate, law-abiding gambling businesses, simply because they think they can get away with it.

Globally, the gambling sector is already heavily regulated and taxed – yet those jurisdictions in which the industry works best are often less restrictive in the conditions they impose on gambling operators.